East Asia and Pacific

Post navigation

This is my first post for a while as I’ve been off ‘fighting ‘ cancer though for a lot of the time ‘enduring ‘ would have been a more appropriate way of putting it .

Anyway, I’ve written a piece for Yale Global asking whether the combination of US concern over the rise of China and the US debt crisis mean the country is now set on path to de facto becoming a regional as opposed to global power.

Media coverage of President Barack Obama’s high-profile visit to Australia and plan to boost US presence in Asia may mask America’s shrinking global footprint. The combination of concern over China and the US debt crisis could set Washington on a course to becoming a mere regional power in the Asia Pacific. Read More

Corruption is generally vilified as an unmitigated evil. It disenfranchises the poor, weakens public services, reduces investment, and holds back whole societies. And yet, in some instances, corruption can actually be very useful, lubricating business in a way that promotes growth, creates jobs, helps smooth the introduction of needed reforms, and reduces poverty.

While a credit-rating cut hangs over some nations, the Southeast Asian giant’s sovereign debt has been bumped back up to investment grade by Fitch Ratings, in December, and Moody’s Investors Service this week. Standard & Poor’s will surely follow suit.

Investors have already rewarded the country for solid fundamentals—foreign direct investment grew 20.2% last year to a record $19.3 billion, the government said Thursday, and, earlier this month, Indonesia sold 30-year bonds at a record-low yield of 5.375%. Meanwhile, gross domestic product growth is trotting along at a healthy 6%-plus, public debt is under control, and inflation is relatively benign at under 6%. Still, there are reasons to be cautious.

Corruption and weak infrastructure are perennial problems. Crumbling roads and inadequate ports especially stifle trade, costing as much as 1% of GDP, according to analysts. A recently enacted land acquisition bill should help. But there is much work to be done.

While India and China gain many more headlines, Indonesia may be both a more attractive bet for investors and a better case study for development professionals trying to find lessons applicable to less developed countries.

Southeast Asia has consistently outperformed Sub-Saharan Africa in income growth. As the below chart indicates, its inhabitants were much poorer than Africans in 1960; today they are two and one-half times richer. In fact, over the past half-century, the region has been the most consistently successful in the developing world, growing almost continuously (apart from a brief hiatus after the 1997 Asian financial crisis).

Source: Tracking Development

Southeast Asia’s growth has also been much more inclusive than Africa’s. Whereas the latter’s two growth spurts since independence—in the 1960s and 2000s—have yielded little poverty reduction, Southeast Asia has produced spectacular reductions. Indonesia, for instance, reduced poverty from 60 percent in 1970 to 22 percent in 1984. Vietnam reduced it from 58 percent in 1993 to 14 percent in 2008.

Rather than acquiesce to a resolution condemning the Syrian government for repressing its people, China and Russia used their vetoes. And rather than support the EU-drafted resolution (as had seemed increasingly likely) Brazil, India and South Africa abstained.

This is a big set-back for the EU and the Americans, who were firmly behind the European initiative. It’s a big win for Russia, which would have been embarrassed if China had even abstained. And it’s a grim moment for Brasilia, Delhi and Pretoria, who have missed the chance to carve out a distinctive position in the Council on Syria, and opted to avoid a confrontation. This was a moment the “IBSA” countries could have seized to show why they deserved more respect at the UN. They missed it.

More analysis tomorrow. For now, congratulations to Gabon and Nigeria for voting for the resolution, refuting the claim that all developing countries are anti-interventionist.

It now looks like the Security Council will vote on a (still too weak) resolution demanding the end of the Syrian crackdown today or tomorrow. Russia is still bad-mouthing the proposal, drafted by the Council’s European members, but other powers are lining up to back it. Brazil – previously numbered among opponents of a resolution along with China, India and South Africa – looks like it’s on board:

In a joint statement issued the same day European nations were to seek a vote on a UN Security Council resolution condemning Syria’s crackdown on protests, EU leaders and visiting Brazilian President Dilma Roussef said the two sides “expressed grave concern” at the current situation in Syria.

“They agreed on the need to continue urging the Syrian authorities to put an end to the violence and to initiate a peaceful transition to democracy.”

Turkish Prime Minister Recep Tayyip Erdogan voiced support for the proposed UN resolution and said he would soon announce sanctions on the neighbouring country.

“The draft resolution before the council today is in the nature of sending a warning. We hope there will a positive outcome of this vote and that there will then be further discussions about whatever further steps need to be taken,” Erdogan told a news conference during a visit to South Africa.

The political picture could change again before the vote, and it can’t be repeated too often that the EU’s resolution has been watered down a lot , with a threat of sanctions reduced to near-invisibility. But I think that this episode underlines the point Franziska Brantner and I made in our recent update on human rights and the UN for ECFR: many non-Western powers, especially rising powers like Brazil, want to distance themselves from Russia’s obstructionism in UN debates. Even China is ready to step away from the Russians, as it did over Côte d’Ivoire. As we noted in our paper, and I repeated here last week, this opens up the EU’s options for coalition-building in New York. It looks like the EU is finally finding ways to use those options…

Post navigation

Global Dashboard explores global risks and international affairs, bringing together authors who work on foreign policy in think tanks, government, academia, and the media. It was set up in 2007 and is edited from the UK by Alex Evans and David Steven. Read more here